What Currency Does New Zealand Use?

What currency does New Zealand use?

If you're planning a visit to Aotearoa, managing international transactions, or exploring business opportunities in the Pacific, understanding New Zealand’s currency is essential. This guide is for holidaymakers, expats, freelancers, and import-export professionals who want to handle money confidently in New Zealand. It covers the official currency, how it works, how to exchange it, and key tips to make the most of your money while avoiding common mistakes.

Introducing the New Zealand Dollar (NZD)

The official currency of New Zealand is the New Zealand Dollar, abbreviated as NZD and often symbolised with a $ or NZ$ to distinguish it from other dollar-based currencies such as the US or Australian dollar. It has been in circulation since 1967, when it replaced the New Zealand pound in a shift to decimal currency.

Locally, the New Zealand dollar is informally referred to as the "Kiwi dollar" — a nickname derived from the national bird and the imagery found on many of the country’s coins.

Where the New Zealand Dollar is used

The New Zealand dollar is the sole legal tender in New Zealand and is also used in several South Pacific island nations and territories, including:

• The Cook Islands

• Niue

• Tokelau

• The Pitcairn Islands

Each of these areas either uses NZD exclusively or in conjunction with their own local coins and notes, which are pegged to NZD at par.

Whether you’re in Wellington, Auckland, Queenstown or on Stewart Island, NZD is the only acceptable currency for transactions in shops, restaurants, public transport, accommodation, and government services.

How the New Zealand Dollar works

The New Zealand dollar is a free-floating currency, meaning its value is determined by the global foreign exchange market. The Reserve Bank of New Zealand (RBNZ) is responsible for managing monetary policy and maintaining currency stability, but it generally does not intervene unless required to ensure orderly market functioning.

The NZD is one of the top 10 most traded currencies in the world due to New Zealand’s strong financial markets, stable government, and open trade economy.

Physical currency breakdown

Coins and notes in New Zealand are:

• Coins: 10 cents, 20 cents, 50 cents, $1 and $2

• Banknotes: $5, $10, $20, $50 and $100

New Zealand banknotes are made from polymer plastic, which makes them highly durable and water-resistant — useful for a country known for outdoor adventure and varied weather.

Benefits and considerations when using NZD

Advantages:

• Stable and secure: NZD is supported by a transparent central bank and a sound banking system.

• Widely accepted cards: Visa, Mastercard, and EFTPOS cards are used throughout the country.

• Contactless and mobile payments: Common in urban areas and increasingly popular even in small businesses.

Challenges:

• Exchange rate fluctuations: Travellers and businesses dealing in other currencies may experience noticeable variations in conversion value.

• Cashless expectations: While not a risk, it’s worth noting that cash is becoming less used—relying solely on it may limit convenience in some settings.

Common misconceptions

A common misunderstanding is that New Zealand uses the Australian Dollar. While the two currencies may seem similar and are close in value, they are not interchangeable. Australian dollars are not accepted in New Zealand, and vice versa.

Another misconception is that tipping is mandatory. In fact, tipping is not expected in New Zealand, and service charges are rarely included. However, tips are appreciated for exceptional service.

Practical tips for managing NZD

• Use local ATMs: Withdrawing money in New Zealand usually offers better rates than exchanging currency abroad. Look for bank-affiliated machines to avoid extra fees.

• Avoid airport exchanges: These typically offer less favourable rates.

• Check bank fees: If using an overseas card, confirm foreign transaction charges with your provider before travel.

• Use EFTPOS where possible: Widely accepted and allows direct access to bank accounts for both debit and credit transactions.

• Carry a small amount of cash: Especially if you’re visiting remote areas where cards may not be accepted.

FAQs

Can I use Australian Dollars in New Zealand?
No. While the two currencies are close in value, they are not interchangeable. You’ll need to convert AUD to NZD before spending.

Are credit and debit cards accepted everywhere?
Yes. Most retailers, restaurants, and transport providers accept cards, including contactless and mobile payment platforms like Apple Pay and Google Pay.

Is it better to exchange currency before arrival or in New Zealand?
Exchanging in New Zealand, especially via ATMs, often offers a better rate than converting cash abroad—though this depends on your card provider’s fees.

Is cash still used?
Yes, but increasingly less so. New Zealand has embraced digital payments, though it’s still a good idea to carry some cash in more rural regions.

Real-life example

A traveller from the UK arrives in Auckland with £300. Rather than exchanging it at Heathrow, they use a travel debit card to withdraw NZD 610 at a local ATM, receiving a better exchange rate. They use contactless payment for public transport, cafes and shops. In the Coromandel Peninsula, they find a local market that only takes cash — their NZD $50 in notes proves essential. By mixing card and cash and avoiding poor-rate exchanges, they stretch their travel budget effectively.